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Problems set to slow HCM City’s growth

Update: June, 25/2018 - 06:00
HCM City’s growth is likely to slow down in the years ahead. --
Viet Nam News

HCM CITY — HCM City’s growth is likely to slow down in the years ahead because it is running out of land, has poor infrastructure and human resources and lacks regional connectivity, a conference has heard.

City Party Secretary Nguyễn Thiện Nhân told the “Reality and solutions to improve HCM City’s economic growth quality and competitive capability to meet integration demands” conference on Saturday that it was vital for HCM City to restructure its economy and we need all possible contributions from experts, scientists, researchers and enterprises.

“The city Party Committee will soon meet to review and decide what we should do in the next 2 1/2 years, and scientific research is very important for new development.”

Nguyễn Trọng Hoài, principal of the HCM City Economics University, said: “HCM City is now becoming a mega city with a population of over 10 million. If it does not expand urban space, traffic congestion would become more serious.”

He said his recent survey had found that 90 per cent of enterprises in the city’s processing zones and industrial parks use medium-level technology, many companies do not use all the land allotted to them and instead rent it out, and 70 per cent of workers are immigrants training whom costs a lot.

“The city must pay more attention to training high-quality human resources, invest more in infrastructure, expand regional connections and restructure the urban space.

The city also needs to restructure industrial production by renovating technologies and improving the effectiveness of land use.”

He urged the city to increase the use of information and communication technology in public administration to reduce time and cost for the public.

Economist Nguyễn Thị Cành of the HCM City Law – Economics University said the city’s economic growth in recent years has been inconsistent, FDI is slowing, efficiency of investments is low, quality of human resources is poor, and it is running up a trade deficit.

“The city needs to improve its business environment, attract more FDI and promote small and medium-sized enterprises.”

Dr Nguyễn Thuấn of the Open University said: “The city must consider science and technology as the foundation to promote its entire economy.”

According to its Department of Planning and Investment, HCM City’s economic growth has been rising by around 0.3 percentage points a year recently (7.72 per cent in 2015, 8.05 per cent in 2016 and 8.25 per cent in 2017).

But the quality of growth is not consistent, and its competitiveness is low.

Growth in the services and construction sector fell from 12.5 per cent in 2006 –10 to 11.2 per cent in 2011 – 2015, while industrial growth declined in that period from 10. 3 to 7.6 per cent.

Industrial production is still focused on consumer goods and many sectors remain labour-intensive.

Services, small trade and real estate still account for a large proportion of the economy while high-tech services account for a very small portion.  — VNS


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